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Re: DONT SQUEAL post# 50905

Thursday, 02/08/2018 8:42:05 AM

Thursday, February 08, 2018 8:42:05 AM

Post# of 68548
Just woke up from my post Board meeting slumber so here are my thoughts on DS points.

Because of the mechanics of the the warrant agreement (measured by a percentage of outstanding rather than absolute shares), LRS shares purchased and the cash they pay for them increases with every increase in OS (including those related to note conversions). Not sure it is a desire to have more skin in the game just good lawyering by LRS lawyers to keep their stake at the same level if they exercise.

I would think you would never use the LLC to do anything regarding ECOS stock. If you used it to acquire or squeeze out the minority it becomes a registrant, needs a separate audit,a registration statement and can't relay on any prior 14C of ECOS. If they went that route they likely would need to structure as a tender, not a merger.

I really don't think they have much room to increase the OS of ECOS under their existing authorization. Most of the shares are reserved to satisfy their obligations on the note conversion and the LRS warrants. My best guess is they have less than 1bn shares they can issue into the market. Remember their latest disclosure was they though they owed 9bn to note holders on conversion which would take them to 22bn and they need 2.5bn to 3bn for LRS warrants.

It likely means there is less risk of them issuing more shares to dilute existing shareholders unless they do another increase in AS. It also means they need to either (i) start generating cash flow to fund operations or (ii) get more loans from HanscomK.


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